East West Bancorp, Inc. · NASDAQ:EWBC
East West Bancorp — Q1 2018 Earnings Presentation
18 slides from East West Bancorp's earnings presentation, Apr 19, 2018
Slide 1: EWBC Earnings Results First Quarter 2018
EWBC Earnings Results First Quarter 2018 April 19, 2018
Slide 2: Forward-Looking Statements
Forward-Looking Statements 2 Forward-Looking Statements Certain matters set forth herein (including any exhibits hereto) constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including forward-looking statements relating to the Company’s
Slide 3: Highlights of First Quarter 2018 Results
1Q18 Net income $187 million 1Q18 Adj.1 Net income $165 million 1Q18 Diluted EPS $1.28 1Q18 Adj.1 Diluted EPS $1.13 Tangible equity1/share $24.07 Record loans $29.6 billion Record deposits $32.6 billion Highlights of First Quarter 2018 Results 3 1 See reconciliation of GAAP to non-GAAP financial mea
Slide 4: 1Q18 Earnings Growth and Profitability
$170 $118 $133 $85 $187 $— 1Q17 2Q17 3Q17 4Q17 1Q18 Net Income and Diluted EPS 1.49% 1.36% 1.44% 1.35% 1.79% 14.9% 13.0% 13.8% 13.0% 17.0% 17.6% 15.3% 16.1% 15.1% 19.7% 5% 10% 15% 20% 25% 30% 35% 0.00% 1Q17* 2Q17 3Q17* 4Q17* 1Q18* Profitability Ratios Adj* return on equity Adj.* return on tang. eq.
Slide 5: 1Q18 Record Loans of $29.6 billion
$26.1 $26.7 $27.5 $28.6 $29.2 20 1Q17 2Q17 3Q17 4Q17 1Q18 $ in b ill ion s +9% +12% +16% +8% Average Loans 1Q18 Record Loans of $29.6 billion 5 EOP loan growth of 2% Q-o-Q (+8% LQA) Avg. loan growth of 2% Q-o-Q (+8% LQA). Largest avg. growth by category: SFR, which increased by 6% Q-o-Q (+25%
Slide 6: 1Q18 Record Deposits of $32.6 billion
0.32% 0.36% 0.40% 0.43% 0.49% 0 1Q17 2Q17 3Q17 4Q17 1Q18 $29.7 $30.2 $31.1 $32.3 $32.3 25 1Q17 2Q17 3Q17 4Q17 1Q18 $ in b ill ion s 1Q18 Record Deposits of $32.6 billion 6 +7% LQA average deposit growthAverage deposits 1Q18 EOP Deposits $ in billions Average Deposits Total Deposit Cost $11.8, $7.9,
Slide 7: 1Q18 Fees & Other Operating Income
9.9 10.7 10.8 10.3 10.4 27% 11.4 12.0 10.2 10.0 9.6 25% 5.0 5.9 6.0 6.5 5.6 15% 4.3 3.5 3.6 2.8 3.0 8% 2.5 3.8 6.7 4.7 6.7 18% 5.5 6.2 3.6 4.1 2.9 7% $0 $10 $20 $30 $40 1Q17 2Q17 3Q17 4Q17 1Q18 1Q18 Mix $ in m ill ion s Total Fees and Other Operating Income Branch fees LC fees & FX income Ancillary
Slide 8: 1Q18 Summary Income Statement
1Q18 Summary Income Statement 8 $ in millions, except per share data 1Q18 4Q17 $ Change % Change Adjusted net interest income $ 321.5 $ 312.7 $ 8.8 3 % ASC 310-30 discount accretion income 5.2 7.0 (1.8) (26) % Net interest income 326.7 319.7 7.0 2 % Fees & operating income 38.2 38.4 (0.2) (1) % Net
Slide 9: 1Q18 Net Interest Income & Net Interest Margin
$272 $290 $303 $320 $327 $200 $220 $240 $260 $280 $300 $320 $340 1Q17 2Q17 3Q17 4Q17 1Q18 Net Interest Income Net interest income $ i n m ill ion s 4.23% 4.40% 4.42% 4.52% 4.69% 0.32% 0.36% 0.40% 0.43% 0.49% 0% 6% 1Q17 2Q17 3Q17 4Q17 1Q18 Average loan yield Total cost of deposits Average Loan Yield
Slide 10: PTPP Profitability and Efficiency
$180 $198 $210 $213 $219 2.09% 2.27% 2.32% 2.27% 2.38% 2.00% 3.00% $150 $210 1Q17 2Q17 3Q17 4Q17 1Q18 Adj.* PTPP income Adj.* PTPP profitability ratio PTPP Profitability and Efficiency 10 *See reconciliation of GAAP to non-GAAP financial measures in the appendix of this presentation and in the Compa
Slide 11: Asset Quality Metrics
$129 $130 $115 $131 0.40% 0.37% 0.31% 0.35% 0.10% 0.30% 0.50% 0.70% 0.90% $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 2015 2016 2017 03.31.18 $ in m ill ion s Nonperforming Assets* Nonperforming assets NPAs / Total assets $23.6 $25.5 $29.0 $29.6 1.12% 1.02% 0.99% 1.01% 0.00% 1.00% 2.00% 3.00% 4.00%
Slide 12: EWBC's Capital Position
$23.13 $24.07 7.0% 8.5% 10.5% 4.0% 9.12% 11.4% 11.4% 12.9% 9.2%9.37% 11.9% 11.9% 13.4% 9.6% 0.015 0.035 0.055 0.075 0.095 0.115 0.135 0.155 $15.00 $25.00 Tangible equity per share Tangible equity to tangible assets ratio CET1 risk-based capital ratio Tier 1 risk-based capital ratio Total risk-based
Slide 13: Management Outlook: Full Year 2018
Management Outlook: Full Year 2018 13 Earnings drivers FY 2018 expectations compared to FY 2017 results Outlook change from prior quarter 1Q18 actual FY 2017 actual End of Period Loans Increase at a percentage rate of approximately 10%. Unchanged. $29.6 billion +8% LQA $29.1 billion, +14% Y-o-Y NI
Slide 14: Appendix
APPENDIX Wy] EAST WEST BANK Your financial bridge”
Slide 15: Appendix: GAAP to Non-GAAP Reconciliation
Appendix: GAAP to Non-GAAP Reconciliation 15 EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands) (unaudited) During the first quarter of 2017, the Company consummated a sale and leaseback transaction on a commercial property and recognized a pre-tax gain on sale
Slide 16: GAAP to Non-GAAP Reconciliation
16 EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands) (unaudited) Adjusted efficiency ratio represents adjusted noninterest expense divided by adjusted revenue. Adjusted pre-tax, pre-provision profitability ratio represents the aggregate of adjusted revenue les
Slide 17: Appendix: GAAP to Non-GAAP Reconciliation (cont'd)
17 (1) Annualized. Appendix: GAAP to Non-GAAP Reconciliation (cont’d) Quarter Ended Yield on Average Loans March 31, 2018 December 31, 2017 March 31, 2017 Interest income on loans (a) $ 337,904 $ 326,401 $ 272,061 Less: ASC 310-30 discount accretion income (5,200) (7,024) (3,233) Adjusted interest i
Slide 18: Appendix: GAAP to Non-GAAP Reconciliation (cont'd)
18 Appendix: GAAP to Non-GAAP Reconciliation (cont’d) (1) Includes core deposit intangibles and mortgage servicing assets. (2) Statutory rate of 29.56% was applied for the quarter ended March 31, 2018. Statutory rate of 42.05% was applied for the quarters ended December 31, 2017 and March 31, 2017.